Bear Stearns High Yield Index return up 0.21% in first four days of 2007

By Paul A. Harris

St. Louis, Jan. 5 - The Bear Stearns High Yield Index, which posted a total return of 11.65% during all of 2006, continued its forward march during the first four days of January 2007 with a 0.21% return for both the new month and the new year.

That is slightly below 2006's 0.224% average weekly return.

Meanwhile over the past week, extending back to the Dec. 28 close, the yield to worst tightened by 4 basis points to 7.84% while the yield-to-worst spread widened by 4 bps to 320 bps.

Ten of the 12 industry sectors have positive year-to-date returns in the New Year.

The media sector, which gave the second-best return among all Bear Stearns High Yield Index sectors during 2006, at 13.20%, shot to the front of the pack so far in 2007 and leads the index with a 0.35% return for the month and year to date.

Close on its heels is the 2006 outperformer, the consumer cyclical sector, which returned 15.73% through all of last year. Its 0.33% return for the new month and year is only 2 bps shy of the media sector's return.

The underperformer thus far in 2007 is the technology sector at negative 0.41%, month and year to date.

The only other negative return among the 12 industry sectors over the first four days of 2007 is health care's negative 0.09%. Health care's 5.05% return for all of 2006 rendered it the Bear Stearns index underperformer for the year.

During the first four days of 2007, one industry subsector generated a return in excess of 1.0%: the media sector's outdoor advertising component is up 1.21% over that brief span of time.

Meanwhile only one subsector has lost more than 1.0% of its value: Health care's services-diagnostic component, the only subsector to end 2006 in the red, has continued its losing ways into 2007, and is down 1.67% for the month and year to Jan. 4.

Since Dec. 28 the market value of the index has increased by about $770 million, to $614.42 billion. During the same period, the issue count remained unchanged at 1,629 issues.

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